How to Overcome the Challenges of Bond ETF Investing

One of the fundamental criticisms of fixed income ETFs is that many indices are constructed according to market cap. The larger a company is, the more debt it is likely to have

Sam Shaw 18 November, 2015 | 11:20AM

The appetite for passive investing shows no signs of waning. Today’s two hottest sectors? Smart beta and fixed income.

Money is moving into fixed income ETFs at a rapid pace as many active fund managers are finding it increasingly difficult to beat their benchmarks, especially in some of the more ‘vanilla’ aspects of the market, such as UK gilts.

“That has provided a nice tailwind for the ETF space,” said Antoine Lesné, head of ETF sales strategy, EMEA at State Street Global Advisors.

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About Author

Sam Shaw  is a financial journalist and broadcaster writing for Morningstar.

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